SECTION 4. WITHDRAWAL OF A

§ 163(j)(7) ELECTION

.01 Time and manner for withdrawing a § 163(j)(7) election.

(1) In general . A taxpayer within the scope of section 3.01 of this revenue procedure may withdraw its § 163(j)(7) election for a 2022, 2023, or 2024 taxable year by filing, by the due date described in section 4.01(3) of this revenue procedure, an amended Federal income tax return, amended Form 1065, or AAR, as applicable, for the taxable year for which the election was initially made, and attaching the election withdrawal statement described in section 4.01(2) of this revenue procedure.

(2) Procedure . The taxpayer’s amended Federal income tax return, amended Form 1065, or AAR must clearly indicate that it is filed pursuant to this revenue procedure.

(a) Electing taxpayers . A taxpayer that is withdrawing an election under § 163(j) or making a late § 168(k)(7) election must write “FILED PURSUANT TO REV. PROC. 2026-17” at the top of the amended Federal income tax return, amended Form 1065, or AAR and attach a statement that:

(i) Is titled “Revenue Procedure 202617 Section 163(j)(7) Election Withdrawal” or, for taxpayers that are both withdrawing a § 163(j)(7) election and making a late election under § 168(k) (7) on the same return, amended Form 1065, or AAR, is titled “Revenue Procedure 2026-17 Section 163(j)(7) Election Withdrawal and Late Section 168(k)(7) Election”;

(ii) Includes the electing taxpayer’s name, address, and taxpayer identification number; and

(iii) Includes a statement that, pursuant to Rev. Proc. 2026-17, the electing taxpayer is withdrawing its election under §§ 163(j)(7)(B), 163(j)(7)(C), or 1.163(j)-1(b)(15)(iii), as applicable and, if applicable, making a late election under § 168(k)(7) on the same return, amended 1065, or AAR. (b) Affected taxpayers . A taxpayer that receives an amended Schedule K-1 as a result of an amended Federal income tax return or amended Form 1065 filed pursuant to this revenue procedure should similarly file an amended Federal income tax return, amended Form 1065, or AAR, write “FILED PURSUANT TO REV. PROC. 2026-17” at the top of the amended Federal income tax return, amended Form 1065, or AAR, and attach a statement that notes that the affected taxpayer is filing as a result of receiving an amended Schedule K-1 from an electing taxpayer that filed an amended Federal income tax return or an amended Form 1065 in accordance with Rev. Proc. 2026-17 .

(3) Due date for withdrawing election on an amended return, amended Form 1065, or AAR . (a) In general . The amended Federal income tax return or amended Form 1065, as applicable, described in sections 4.01(1) and 4.01(2) of this revenue procedure must be filed on or before the earlier of (i) October 15, 2026, or (ii) the end of the applicable period of limitations on assessment for the taxable year for which the amended return is being filed. A partnership filing an amended Form 1065 must also furnish any corresponding Schedules K-1 by the applicable date in the previous sentence. In the case of a BBA partnership filing an AAR, the AAR described in sections 4.01(1) and 4.01(2) of this revenue procedure must be filed

on or before the earlier of (i) October 15, 2026, and (ii) the last day of the § 6227(c) period during which the partnership may file an AAR for the taxable year for which the election was made.

(i) Taxpayers should be aware that, with regard to withdrawing a § 163(j)(7) election, neither § 6501, which governs the statute of limitations for assessment and collection, nor § 6511, which governs the statute of limitations for claims for credit or refund, were amended by the OBBBA. Section 6501 generally provides that any tax imposed under the Code shall be assessed within three years after the return was filed, whether or not the return was timely filed. Generally, under § 6501(b), a return of income tax under chapter 1 of the Code that is filed before the due date of the return is deemed filed on the due date.

(ii) Section 6511 generally provides that the period of limitations for credit or refund expires three years from the time the return was filed or two years from the time the tax was paid, whichever period expires later. Under § 6513(a), for purposes of § 6511, any return filed before the last day prescribed for filing thereof is considered filed on such last day. Thus, a claim for credit or refund arising from a withdrawal of a § 163(j)(7) election under this section 4 made on an amended return will be considered timely only if it is filed on or before the due date for filing a claim for refund for such taxable year under § 6511 or § 301.6511(a)-1(a)(1) (the date that is three years from the time the return was filed for the taxable year or within 2 years from the time the tax was paid, whichever of such periods expires the later).

(b) Example 1 . Taxpayer, a C corporation, timely filed a Federal income tax return for its taxable year beginning January 1, 2022, and ending December 31, 2022, on March 1, 2023. Under section 4.01(2) (a) of this revenue procedure, and consistent with § 6501(a) and (b), the taxpayer’s due date for filing an amended return to withdraw a § 163(j)(7) election under this section 4, for the taxable year ending December 31, 2022, is April 15, 2026.

(c) Example 2 . Taxpayer, a C corporation, timely filed (including extensions) a Federal income tax return for its taxable year beginning January 1, 2022, and ending December 31, 2022, on May 15, 2023. Under section 4.01(2) of this revenue procedure, and consistent with § 6501(a), the taxpayer’s due date for filing an amended return to withdraw a § 163(j) (7) election under this section 4, for the taxable year ending December 31, 2022, is May 15, 2026.

April 6, 2026 808 Bulletin No. 2026–15

(1) In general . A taxpayer within the scope of section 3.02 of this revenue procedure may make a late § 168(k)(7) election on the same amended Federal income tax return, amended Form 1065, or AAR filed under section 4.01(1) or (5) of this revenue procedure. The late § 168(k)(7) election is made in the manner provided in § 1.168(k)-2(f)(1)(iii)(B). See section 4.01(2) of this revenue procedure for a description of the statement required to be attached to an amended return, amended Form 1065, or AAR that contains a late § 168(k)(7) election, and the recommendation for affected taxpayers. An amended Federal income tax return, amended Form 1065, or AAR filed pursuant to this section 5.01(1) must be filed by the same due dates described in section 4.01(3) of this revenue procedure.

(2) Due Date . The due date for the amended return, amended Form 1065, or AAR that contains a late § 168(k)(7) election is the same as in section 4.01(3) of this revenue procedure.

(3) Relevant adjustments . The amended return, amended Form 1065, or AAR containing a late § 168(k)(7) election must include any adjustments to taxable income for the late § 168(k)(7) election and any collateral adjustments to taxable income or to tax liability.

(4) Affected succeeding taxable years . A taxpayer making a late § 168(k)(7) election for a taxable year must file an amended Federal income tax return, amended Form 1065, or AAR, as applicable, to reflect any collateral adjustments to taxable income or to tax liability for any affected succeeding taxable years. An example of such collateral adjustment is the amount of depreciation allowed or allowable in the succeeding taxable years after the taxable year in which the property is placed in service. The taxpayer should indicate in a statement attached to the amended Federal income tax return, amended Form 1065, or AAR that it is filing such amended return or AAR under section 5.02 of Rev. Proc. 2026-17. An amended Federal income tax return, amended Form 1065, or AAR filed pursuant to this section 5.01(4) must be filed by the same due dates described in section 4.01(5) of this revenue procedure.

.02 If taxpayer is currently under examination . If a taxpayer is under examination for the 2022, 2023, or 2024 tax

(d) Example 3 . Taxpayer, a C corporation, timely filed (including extensions) a Federal income tax return for its taxable year beginning February 1, 2022, and ending January 31, 2023, on October 31, 2023. Under section 4.01(2) of this revenue procedure, and consistent with § 6501(a), the taxpayer’s due date for filing an amended return to withdraw a § 163(j)(7) election for the taxable year ending January 31, 2023, is October 15, 2026.

(4) Relevant adjustments . For the withdrawn § 163(j)(7) election to be effective, the amended Federal income tax return, amended Form 1065, or AAR, as applicable, must include the adjustments to taxable income due to the withdrawn § 163(j)(7) election and any collateral adjustments to taxable income or to tax liability, including modifications to any adjustments under § 481. An example of such collateral adjustments is the amount of depreciation allowed or allowable in the applicable taxable year for the property to which the withdrawn § 163(j)(7) election applies.

(5) Affected succeeding taxable years . A taxpayer also must file amended Federal income tax returns, amended Forms 1065, or AARs, as applicable, for any affected succeeding taxable years to reflect any adjustments to taxable income due to the withdrawn § 163(j)(7) election and any collateral adjustments to taxable income or to tax liability, including modifications to any adjustments under § 481. An example of such collateral adjustments is the amount of depreciation allowed or allowable in the applicable taxable year for the property to which the withdrawn § 163(j)(7) election applies. A copy of the election withdrawal statement described in sections 4.01(1) and 4.01(2) of this revenue procedure must be attached to any amended Federal income tax return, amended Form 1065, or AAR filed for any affected succeeding taxable years under this section 4.01(5). The amended Federal income tax return or amended Form 1065, as applicable, for an affected succeeding taxable year must be filed on or before the earlier of (i) October 15, 2026, and (ii) the end of the applicable period of limitations on assessment for the taxable year for which the amended return is being filed. A partnership filing an amended Form 1065 must also furnish any corresponding Schedules K-1 by the applicable date in the previous sentence. In the case of a BBA partnership filing an AAR, the AAR

for an affected succeeding taxable year must be filed on or before the earlier of (i) October 15, 2026, and (ii) the last day of the § 6227(c) period during which the partnership may file an AAR for the taxable year in which the election was made.

.02 Effect of withdrawing a § 163(j) (7) election . A taxpayer within the scope of section 3.01 of this revenue procedure will be treated as if the § 163(j)(7) election had never been made if the taxpayer withdraws the election as provided in this section 4. If the taxpayer is a partnership, the capital accounts of the partnership will not be maintained in accordance with § 1.7041(b)(2)(iv) unless the effect of the withdrawal is reflected in the capital accounts of its partners.

.03 Depreciation and basis . A taxpayer that is withdrawing a § 163(j)(7) election must determine its depreciation deduction for the property that is affected by the withdrawn election in accordance with § 168, and include any change in the amount of such depreciation deduction due to the withdrawal of the § 163(j)(7) election as part of the relevant adjustments described in section 4.01(2) of this revenue procedure, on its amended Federal income tax return, amended Form 1065, or AAR, as applicable. Additionally, the basis of the property affected by the withdrawn election must be adjusted to take into account any change in the amount of such depreciation due to the withdrawal of the § 163(j)(7) election and, if applicable, a late § 168(k)(7) election made under section 5 of this revenue procedure.

.04 If taxpayer is currently under examination . If a taxpayer is under examination for the 2022, 2023, or 2024 taxable year, the taxpayer must provide a copy of any amended Federal income tax return, amended Form 1065, or AAR filed under sections 4.01(1) or 4.01(5) of this revenue procedure to the revenue agent coordinating the taxpayer’s examination no later than the date the taxpayer files the amended return, amended Form 1065, or AAR.